SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15 (d) of the
Securities and Exchange Act of 1934
Date of Report (Date of earliest event reported): July 12, 1996
COEUR D'ALENE MINES CORPORATION
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(Exact name of Registrant as specified in its charter)
Idaho 1-8641 82-0109423
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification
Number)
400 Coeur d'Alene Mines Bldg.
505 Front Avenue
Coeur d'Alene, Idaho 83814
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(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code: (208) 667-3511
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Not Applicable
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(Former name or former address, if changed since last report)
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Item 4. Other Events
Because of increased expenditures related to remediation of the ground
movement which impacts the tailings impoundment at its Golden Cross mine, the
Registrant announced that its second quarter results will include a
non-recurring asset write-down of approximately $53 million. The write-down
includes accrual of remediation costs. The Registrant believes that this
matter results from the failure of the previous owner of the property to make
required disclosures to Registrant when Registrant purchased the Golden Cross
Mine from it in 1993 and Registrant is, therefore, asserting claims against
the previous owner.
The ground movement at the New Zealand mine is centralized 60 meters
beneath a slope upon which the mine's tailings facility is located. Since the
first quarter of this year, Registrant has been constructing a 1,500
meter-long drainage tunnel to relieve underground watertable pressure thought
to be causing the movement, as well as performing other dewatering and slope
stabilization work. Initially it was believed that remediation costs would be
about $4 million. Recently, revised estimates of the costs of necessary
remedial measures, however, have raised that expected expenditure to clearly a
substantially higher amount. As a consequence, the Registrant now believes
that it should write-down the entire carrying value of its 80 percent interest
in that property.
Registrant purchased its interest in Golden Cross in April 1993.
Subsequent to learning of the ground movement, and after determining the
needed remedial measures, Registrant advised the seller that it believes it is
responsible for the consequences of remedying the problem because of its
failure to disclose to Registrant the true nature of the ground movement risks
before Registrant's acquisition of an 80 percent interest in the Golden Cross
property.
An engineering evaluation is underway to determine the full extent and
cost of the remedial measures required to stabilize the land movement on site.
This may have an adverse impact on the mine operations. It had been
anticipated that Golden Cross would yield to Registrant approximately 77,000
ounces of gold and 251,000 ounces of silver in 1996. The mine continues to
operate at the highest environmental standards.
The write-down of $53 million reduces the Registrant's total assets by
only 9 percent. In addition, after the write-down, stockholders' equity will
be approximately $350 million and the Company's long-term debt-to-equity ratio
.59 to 1.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: July 11, 1996 By: /s/JAMES A. SABALA
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James A. Sabala
Senior Vice President and
Chief Financial Officer
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